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A.L.A. Schechter Poultry Corp. v. United States
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| A.L.A. Schechter Poultry Corp. v. United States | |
| Reference: 295 US 495 (1935) | |
| Term: 1934 | |
| Important Dates | |
| Argued: May 2-3, 1935 Decided: May 27, 1935 | |
| Outcome | |
| Second Circuit Court of Appeals reversed | |
| Majority | |
| Chief Justice Charles Hughes • Willis Van Devanter • James Clark McReynolds • Louis Brandeis • George Sutherland • Pierce Butler • Harlan Fiske Stone • Owen Josephus Roberts • Benjamin Nathan Cardozo | |
| Concurring | |
| None | |
| Dissenting | |
| None | |
A.L.A. Schechter Poultry Corp. v. United States is a case decided on May 27, 1935, by the United States Supreme Court in which the court invalidated Section 3 of the National Industrial Recovery Act of 1933 (NIRA) in violation of the nondelegation doctrine. Schechter—along with Panama Refining Co. v. Ryan— is one of two cases in which the United States Supreme Court has struck down legislation on nondelegation grounds. The case concerned Congress' delegation of legislative power to the executive branch to administer NIRA as well as the federal government's power to oversee intrastate commerce.[1]
Why it matters: The Supreme Court struck down Section 3 of NIRA, a major component of the New Deal. The decision also clarified the boundaries governing the delegation of Congressional power, reiterating the intelligible principle requirement from J.W. Hampton Jr. & Company v. United States (1928) and the further limits set by Panama Refining Co. v. Ryan (1935).[2] It also set a narrower definition of interstate commerce, holding that if any business using components shipped in from other states qualified as interstate, then "there would be virtually no limit to the federal power," so the concept applied only to the actual flow of goods between states. The internal policies and practices of local companies using components from other states thus fell under intrastate commerce and outside the jurisdiction of the federal government.[1]
Background
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National Industrial Recovery Act
The National Industrial Recovery Act of 1933 (NIRA) aimed to alter the government's approach to regulating business. NIRA authorized the National Recovery Administration to create industry-wide "codes of fair competition," with input from both businesses and labor unions, to replace existing antitrust laws.[3]
Schechter challenge to NIRA
Under NIRA, the National Recovery Administration formulated the "Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and about the City of New York" (the Live Poultry Code), which set rules for the poultry industry regarding hours, wages, health and safety, and other practices. Schechter Poultry Corporation was charged and convicted of 19 code violations by the United States District Court for the Eastern District of New York. Schechter appealed the district court's decision, but the United States Court of Appeals for the 2nd Circuit sustained all but two of the convictions.[1]
Schechter petitioned the United States Supreme Court, arguing that NIRA violated the nondelegation doctrine by unlawfully delegating legislative authority to the National Recovery Administration. Schechter also claimed that the Live Poultry Code was unconstitutional in violation of the Tenth Amendment because the federal government had no authority to regulate intrastate commerce. Lastly, Schechter contended that NIRA violated the due process clause of the Fifth Amendment.[1]
Oral argument
Oral arguments were held on May 2 & 3, 1935. The case was decided on May 27, 1935.[4]
Decision
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The Supreme Court ruled 9-0 that Section 3 of NIRA violated Article I and the Tenth Amendment. Chief Justice Charles E. Hughes wrote the majority opinion, and he was joined by Justices Willis Van Devanter, James Clark McReynolds, George Sutherland, Louis Brandeis, Pierce Butler, and Owen Roberts. Justice Benjamin Cardozo wrote a concurring opinion and was joined by Justice Harlan Fiske Stone.
Opinions
Opinion of the court
The United States Supreme Court ruled unanimously in favor of Schechter, holding that Section 3 of NIRA violated Article I of the U.S. Constitution by delegating legislative power to the executive branch without first establishing an intelligent principle—effectively allowing the president "to exercise an unfettered discretion to make whatever laws he thinks may be needed." In particular, NIRA authorized the National Recovery Administration to create industry-wide codes of fair competition but failed to define the parameters of fair and unfair competition. The absence of these definitions played a significant part in the majority opinion's argument that NIRA represented an unconstitutional delegation of congressional power.[1][3]
The court also held that Section 3 of NIRA violated the Tenth Amendment, though it declined to rule on the Fifth Amendment question. In the case opinion, Chief Justice Charles E. Hughes stated that although NIRA claimed the authority to regulate such wide-ranging issues as hours, wages, and sales procedures as part of the federal government's authority over interstate commerce, many of these practices took place within states outside of federal jurisdiction.
Panama Refining Company v. Ryan
The Schechter decision cited precedent from Panama Refining Co. v. Ryan (1935), an earlier case that also challenged provisions of NIRA on nondelegation grounds. In Panama, the United States Supreme Court struck down section 9(c) of NIRA, which authorized the president to ban the interstate sale of excess petroleum and delegated rulemaking authority to administer the provision to the secretary of the Department of the Interior.[5] The court held that while Article I of the U.S. Constitution did not prevent Congress from delegating rulemaking authority to administrative agencies, there were clear constitutional limitations on that authority.[1][3]
Concurring opinions
Justice Benjamin Cardozo concurred with the court's judgment but argued that because of its attempt to regulate intrastate matters such as hours and wages, even Congress did not have sufficient authority to enforce the Live Poultry Code:
| “ | If this code had been adopted by Congress itself, and not by the President on the advice of an industrial association, it would even then be void, unless authority to adopt it is included in the grant of power 'to regulate commerce with foreign nations, and among the several States.' United States Constitution, art. 1, 8, cl. 3.
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” |
Text of the opinion
Impact
Schechter Poultry v. United States was one of the major cases in the development of the nondelegation doctrine, the body of jurisprudence governing when and how Congress may delegate its power to other parts of the government. The New Deal involved significant changes to the structure and operation of the Executive Branch, so the court cases of the late 1930s did much to clarify how these changes would be implemented.
In his majority opinion, Chief Justice Hughes set forth a comparatively narrow vision of interstate commerce:
| “ | The undisputed facts thus afford no warrant for the argument that the poultry handled by defendants at their slaughterhouse markets was in a 'current' or 'flow' of interstate commerce, and was thus subject to congressional regulation. The mere fact that there may be a constant flow of commodities into a state does not mean that the flow continues after the property has arrived and has become commingled with the mass of property within the state and is there held solely for local disposition and use.[6] | ” |
The federal government's power to regulate interstate commerce stems from the Commerce Clause in Article I, Section 8 of the U.S. Constitution and has been used to justify many legislative and regulatory actions.[7]
The Schechter ruling was part of a series of judicial setbacks to Franklin Roosevelt's New Deal agenda that may have inspired his attempt to pass the Judicial Procedures Reform Bill of 1937. The bill would have empowered the president to appoint a new Supreme Court justice for every existing one over the age of 70, which would have given Roosevelt six new appointments upon its passing.[8] The bill did not pass, though some scholars, including Douglas Linder of the University of Missouri-Kansas City, argue that it influenced the behavior of the court in subsequent cases related to other New Deal programs.[7]
See also
- Gibbons v. Ogden
- Nondelegation doctrine
- Separation of powers
- Rulemaking
- Administrative law
- Supreme Court of the United States
- History of the Supreme Court
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Supreme Court of the United States (via Findlaw), A.L.A. SCHECHTER POULTRY CORPORATION v. UNITED STATES, decided May 27, 1935
- ↑ CaseBriefs, Panama Refining Co. v. Ryan, accessed November 6, 2017]
- ↑ 3.0 3.1 3.2 Our Documents.gov, National Industrial Recovery Act (1933), accessed November 2, 2017
- ↑ Oyez, A. L. A. Schechter Poultry Corporation v. United States, accessed November 2, 2017
- ↑ CaseBriefs, Panama Refining Co. v. Ryan, accessed November 2, 2017
- ↑ 6.0 6.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 7.0 7.1 The University of Missouri-Kansas City, The Federal Commerce Power, accessed November 6, 2017
- ↑ National Constitution Center, How FDR lost his brief war on the Supreme Court, accessed November 6, 2017
